501(c)3 status

My community choir is in the process of applying for 501(c)3 status. The group was turned down a few years ago, but I'm not sure why (I wasn't involved at that point). We recently met with a Community Foundation representative, and she told us that the reason why we were turned down is more that likely because our members pay dues. She indicated that 501(c)3 groups cannot charge dues.

My question: I know of other choral groups that charge dues who have received 501(c)3 status. Those of you who direct a community choir, does your group have 501(c)3 status? Do you charge dues? Did anyone ever tell you that you couldn't charge dues if you were a 501(c)3 organization?

I am meeting with a lawyer in a week to discuss this issue, and I would really appreciate any information you can give me before that time. Thank you so much!

Many people call "dues" a payment to the organization, but it is a misnomer. With The Orlando Chorale we got around this issue by calling it a "music fee." Singers kept the music we bought as part of this support to the organiation.

[Coming from me as a private citizen without legal training] Membership dues are common in the nonprofit world and wouldn't be a cause for denying 501(c)3 status. My guess is that it was something else. The IRS has a lot of information online, but basically, you have to show that your choir would be working in some way for the public good. Like ACDA does by inspiring excellence in choral music!

IRS publication 557, which describes the requirements for 501(c)(3)s, references member dues 30+ times, taking them for granted as a normal part of nonprofit operations. Here's a brochure which gives an overview of the application process. I wouldn't rely on hearsay in this case; see if somebody has the actual rejection letter. I would guess that the stickiest wicket for a small community choir is if most of the income goes to the conductor as salary.

Many 501 (c) (3) groups have members and charge a membership fee....off-hand I can think of theatre companies, the YMCA....and others. Your problem might be that you do not have a charitable aspect. The IRS designation is for charitable purposes..... our choir performs all of our concerts in partnership with a charity, splitting the gate. Our members pay dues. There was never any question of our qualification for non-profit status. Read the IRS code...it quite clearly defines who qualifies. Educational aspects are also a good qualifier... if you hold classes or help support arts education in your community. Go to the source! Read the code.

We have belonged to several organizations that had 501(c)3 status & charged dues. The group that my husband & I currently run (& founded) asks that the singers pay a one-time initiation fee & that they purchase their music.

I seem to recall when we applied for 501(c)3 that we had to have a FEIN & be in existence for a year or two before we could actually apply. Is it possible that your group was too "new" at the time of the first application?

The issue is not whether a 501(c)3 can collect dues (it can), the issue is whether the payor can claim them as a deduction. In order to be tax-deductible, money donated must be a gifr, i.e. nothing of value received in return. If your singers pay a membership fee, they are joining the organization, in a manner of speaking (like becoming a "member" of NPR), whereas "dues" implies a payment for services received.

I know, it is an issue of semantics, but if you want your singers to be able to deduct the "donation", define it as membership or music fee (the music fee offsets the organizations expense), if you (or your singers) don't care, call it dues...